Trump wants to lower taxes, except for very rich

Leading Republican White House hopeful Donald Trump said Monday he would eliminate taxes for millions of lower-income Americans, reduce middle class tax burdens and end beneficial deductions for the wealthy.

“We’re lowering taxes very substantially,” Trump said as the billionaire real estate tycoon unveiled his tax plan that he pledged would simplify the tax code, encourage investment and spur US economic growth.

“We have an amazing code. It will be simple. It will be easy. It will be fair,” Trump told a press conference at company’s New York headquarters.

Under a President Trump, some 50 percent of US households would pay no federal income tax because the household earned less than $50,000.

In 2013, 43 percent of US households did not pay federal income tax, according to the Tax Policy Center.

The three other brackets would be 10 percent, 20 percent, and 25 percent, the latter being for those households with income of $300,000 or more.

The current highest tax bracket is 39.6 percent for individuals making more than $413,000.

While Trumps’ highest rate is dramatically lower, he would end many existing deductions that wealthy Americans have used to reduce their tax burden.

“We’re reducing taxes, but believe me there will be people in the very upper echelons that won’t be thrilled with this,” he said.

“We’re taking away deductions and that’s one of the reasons we’re able to lower it.”

Trump acknowledged that eliminating deductions and loopholes available for special interests was “going to cost me a fortune.”

But his plan’s focus on reducing US business income tax — from the top bracket of 35 percent today to 15 percent under Trump — could also yield a windfall for the US government.

He said the tax drop could lure back US corporations that have relocated abroad, and help return the $2.5 trillion that Trump says American businesses have parked overseas.

“As an example I have millions of dollars overseas,” Trump said.

“I can’t bring it back into this country. We file papers, we’ve been doing this for a year and half. We can’t get it back in, so the money stays in other countries.”

Specifically, Trump’s plan would end the beneficial tax rate for “carried interest,” the income that rich hedge fund managers in particular have earned and that gets taxed at a maximum rate of 20 percent — just half of the current highest tax bracket.